Nigerian mutual funds experienced a decline in return on investment (ROI) of 0.4% for the month of October 2022, as their net asset value decreased by N13.83 billion to N1.48 trillion.
Information from Nigeria’s Securities and Exchange Commission corroborates this. The Net Asset Value (NAV) of the 131 mutual funds registered with the SEC dropped from N1.49 trillion on September 30, 2018, to N1.48 trillion on October 28, 2022.
According to further analysis, infrastructure funds recorded an increase of N12.78 billion during the review month, while investments in fixed-income funds plummeted by N16.89 billion. Despite the underwhelming performance of mutual funds during this period, dollar-denominated funds led the rankings of the best performers.
Since the US Federal Reserve has raised interest rates multiple times to curb the escalating inflation rate, the US dollar has strengthened against other currencies throughout this year.
By analyzing the percentage variation in offer pricing from September 30 to October 28, 2022, analysts were able to evaluate the performance of these mutual funds.
The mutual funds that showed the best performance in October 2022, according to returns, are listed below. Furthermore, we emphasized how their net asset value evolved over time and included fund profiles directly from their websites.
Nova Dollar Fixed Income Fund – Novambi Asset Management
The Nova Dollar Fixed Income Fund offers investors an opportunity to safeguard their capital while earning returns from investments in medium- to long-term securities with financial institutions recognized by the Securities & Exchange Commission, including Sovereign Eurobonds, Corporate Eurobonds, Money Market, and Cash.
30th September 2022
Fund Price – N330.41
28th October 2022
Fund Price – N337.55
Return – 2.2%
Ranking – Fifth
With a return of 2.2%, the Nova Dollar Fixed Income Fund secured the fifth position among the top-performing mutual funds for October 2022. Additionally, the fund’s net asset value increased by 2.1% from N84.47 million on September 30 to N86.24 million at the close of October 2022.
FBN Dollar Fund (Retail) – FBNQuest Asset Management Limited
The FBN Dollar Fund is a mutual fund that provides investors with access to debt securities denominated in USD. This retail fund necessitates a minimum investment of $1000 and carries a medium to moderate risk.
30th September 2022
Fund Price – N55,258.07
28th October 2022
Fund Price – N56,487.7
Return – 2.2%
Ranking – Fourth
As of October 28, 2022, the net asset value of the FBN Dollar fund increased by 4.9%, rising from N12.42 billion recorded in the previous month to N13.02 billion. On the compilation of top-performing mutual funds for the month in question, the dollar fund positioned itself at number four.
United Capital Eurobond Fund – United Capital Asset Mgt. Ltd
The United Capital Eurobond Fund is an open-ended mutual fund that allocates investments to leading corporations and dollar-denominated Eurobonds issued by the Federal Government of Nigeria. The initial investment required is $1,000, with subsequent investments in increments of $500.
30th September 2022
Fund Price – N54,010.27
28th October 2022
Fund Price – N55,235.37
Return – 2.3%
Ranking – Third
By October 28, 2022, the net asset value of the United Capital Eurobond fund had decreased by 6.4%, or N75.73 billion. Although classified as a Eurobond fund, it is dollar-denominated and is trailing other dollar funds that are yielding positive returns.
Stanbic IBTC Dollar Fund – Stanbic IBTC
The Stanbic IBTC Dollar Fund (SIDF) is a dollar fixed-income fund launched by Stanbic IBTC Asset Management in January 2017 with the objectives of providing currency diversification, generating income, and ensuring sustainable growth in USD.
To achieve these objectives, it aims to allocate a minimum of 70% of the portfolio to high-quality Eurobonds, 30% or more to short-term USD deposits, and 10% or less to USD equities that have been approved and registered by the Securities and Exchange Commission of Nigeria.
30th September 2022
Fund Price – N584.75
28th October 2022
Fund Price – N599.35
Return – 2.5%
Ranking – Second
Stanbic IBTC emerged as the top dollar fund in October 2022, though the PACAM balanced fund ultimately triumphed with a 2.5% ROI during the review month. Conversely, as of October 28, 2022, the net asset value dropped by 2.7% to N184.02 billion.
PACAM Balanced Fund – PAC Asset Management Ltd
The primary objective of the PACAM Balanced Fund is to achieve long-term capital growth through investments in a blend of equities and fixed-income securities. The Fund Allocation Model prioritizes diversification and stability of investments using the fixed-income asset class to mitigate the volatility associated with equity investments while maximizing the advantages of both asset categories, as per the information provided on the company’s website.
This fund focuses on a variety of investment-grade fixed-income instruments, money market instruments, and real estate assets in Nigeria, in addition to high-quality publicly listed equities on the Nigerian Stock Exchange.
30th September 2022
Fund Price – N1.65
28th October 2022
Fund Price – N1.79
Return – 8.4%
Ranking – First
The leading mutual fund in October 2022 was the PACAM Balanced Fund, which achieved an ROI of 8.4% during the month in question. Nevertheless, by October 28, 2022, the net asset value had declined by 1.5% to N156.35 million.
Important information regarding mutual funds
Mutual funds are financial entities that aggregate capital from numerous investors and allocate it across a wide variety of securities, which include stocks, bonds, money market instruments, and other types of assets.
Professional fund managers oversee mutual funds, investing the fund’s capital with the aim of generating income and capital gains for the investors.
Investors in these funds receive their share of the profits from the diversified pool of investments annually, semi-annually, or as outlined in the fund’s prospectus.
